I've got a GeForce FX5200 128MB video card and 512RAM, in a 3ghz pentium 4 and the demo isnt running smoothly on high detal level and with high detail shades, polygons, etc...What should I do ? Get a better video card ?

It could be a combination of RAM and videocard. More then likely it's because of your videocard, the FX 5200 is a slightly dated card now adays having been one of the top tier cards back in the 4800 days (for NVidia), but boosting the RAM never hurts as it allows the game more memory to work with (I realize that 512 is the "reccomended" amount, but going higher than 512 doesn't hurt).

I don't know if any other specs are important. But, is that good enough to run at max detail levels? There seemed to be some slowdown in the demo while using the cinematic camera, and when zoomed in close. I guess it might have had a slower frame rate all the time, or at least on Tatooine (maybe other planets as well).

I'm not good with the hardware specs as far as how to set graphics in the games. I'm a software guy. Hardware confuses me.